Microecon

Economists generally agree that people are most likely to change their behavior when they: A. are asked to do so voluntarily. B. are given incentives to do so. C. live in a world without scarcity. D. live in a world without opportunity costs.

B. are given incentives to do so. Economists assume that people will systematically act in ways to make themselves better off.

The condition of scarcity means that: A. when the government produces something, there is no opportunity cost. B. choices must be made in the allocation of productive resources. C. you will not incur an opportunity cost if you make the right choice. D. only a command economy can make efficient use of resources.

B. choices must be made in the allocation of productive resources. Scarcity arises from the fact that the naturally occurring amount of productive resources is less than the amount we can make use of.

An opportunity cost arises: A. only when a monetary cost is incurred. B. only when a time cost is incurred. C. whenever any choice is made. D. only when the wrong decision is made.

C. whenever any choice is made. The opportunity cost resides in the forgone alternative.

With which one of the following statements would economists most likely disagree? A. People respond to incentives. B. Making a choice involves an opportunity cost. C. Markets move towards equilibrium. D. Resources and inputs used in production are unlimited.

D. Resources and inputs used in production are unlimited. Inputs used in production such as labor and natural resources have finite amounts available.

Macroeconomics is the branch of economics studying: A. how prices are determined. B. why trade-offs exist. C. how decisions are made at the margin. D. fluctuations in the overall level of business activity.

D. fluctuations in the overall level of business activity. The ups and downs in economic activity are the focal point of macroeconomic theory.